Abstract:
Austin, Texas-based Nano-Proprietary, Inc. (OTCBB: NNPP) announced that its subsidiary, Applied Nanotech, Inc. ("ANI"), completed its Small Business Innovation Research ("SBIR") Phase II contract with the U.S. Air Force covering the development of a Carbon Monoxide ("CO") sensor system.

Nano-Proprietary, Inc. Announces Completion of Air Force Contract

Austin, TX | Posted on May 5th, 2008

Under this contract, ANI developed a CO sensor system and delivered three test units to the U.S. Air Force. The sensor system is a handheld, battery operated, low power unit with an estimated operational time of up to 8,000 hours with a single battery. The unit measures CO levels at temperatures ranging from -40C to 60C and at concentration levels from 0-250 parts per million. Visual and audible alarms are activated at two programmable CO concentration thresholds. As a result of proprietary control algorithms and electronic circuitry developed during the project, ANI has created a sensor system which has enhanced accuracy levels below 20 parts per million and low power consumption. The unit provides the capability to store measured data, including CO level, temperature, alerts, and time stamp, at regular intervals to an internal data log. The CO sensor system includes software which may be installed on a PC to download the data log or for real time monitoring of the device.

"I strongly believe that our CO sensor system can be of benefit to the U.S. Air Force and other military organizations after proper ruggedization," said Dr. Zvi Yaniv, President and Chief Executive Officer of Applied Nanotech, Inc. "In parallel, we will simplify and reduce costs for the system in order to provide a solution for high volume commercial applications, such as combination carbon monoxide and smoke detectors."

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About Nano-Proprietary, Inc.Nano-Proprietary, Inc. is a holding company consisting of two wholly owned operating subsidiaries. Applied Nanotech, Inc. is a premier research and commercialization organization dedicated to developing applications for nanotechnology with an extremely strong position in the fields of electron emission applications from carbon film/nanotubes, sensors, functionalized nanomaterials, and nanoelectronics. Electronic Billboard Technology, Inc. (EBT) possesses technology related to electronic digitized sign technology. The Companies have over 300 patents or patents pending. Nano-Proprietary's business model is to license its technology to partners that will manufacture and distribute products using the technology. Nano-Proprietary's website is www.nano-proprietary.com.

SAFE HARBOR STATEMENT

This press release contains forward-looking statements that involve risks and uncertainties concerning Nano-Proprietary's business, products, and financial results. Actual results may differ materially from the results predicted. More information about potential risk factors that could affect our business, products, and financial results are included in Nano-Proprietary's annual report on Form 10-K for the fiscal year ended December 31, 2007, and in reports subsequently filed by Nano-Proprietary with the Securities and Exchange Commission ("SEC"). All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval System (EDGAR) at www.sec.gov or from Nano-Proprietary's website listed below. Nano-Proprietary hereby disclaims any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.